The last sterling denominated UK CMBS to hit the market was Logistics UK 2015, a £646m three year transaction that was launched in July 2015. A month earlier the £489m MINT 2015 was priced.
The £350m Taurus 2017-2 will be sold in five tranches, rated triple-A to double-B. All classes have an expected maturity of November 2022. The deal also includes a £10m tranche of unrated and retained class ‘X’ notes that are senior to classes ‘B’, ‘C’, ‘D’ and ‘E’.
Calls and meetings began on Monday and BAML plans to price the deal next week on November 20.
The loan-to-value ratio of the single loan backing the deal is 67.13% and it is secured on 127 last mile logistics properties to over 1,070 tenants across the UK with a collective value of £546.6m. The debt yield is 9.0% and the current occupancy rate is 92%.
An investor who had seen the deal said he was waiting for more securitization supply to move through the pipeline early in 2018, as the European Commission's approval of securitizing legacy self-certified loans would lead to an increase in RMBS activity.
He also noted that the UK’s Term Funding Scheme was scheduled to finish in February and suggested that this would also encourage a pick-up in primary activity.
“There’s probably room for one or two more deals this year but I think we’re going to have a much busier than usual start to next year and that means there's going to be more choice,” he said.